More Habitat News

Ask Phil Johnson and he'll tell you: Builders aren't buying lots.
The developer had sat on 30 lots left in Clover Field, a development in Chaska, for a full year when -- "at last" -- Twin Cities Habitat for Humanity approached him about four of them. That was in addition to five other lots Habitat had bought from him a year earlier.
You see, Habitat for Humanity is buying -- lots of lots.
The nonprofit is capitalizing on a dogged housing market, snatching up property within stalled developments in cities it otherwise couldn't afford: Chaska, Ramsey and Woodbury among them.
And soon, it will move to benefit from another trend in housing -- foreclosures. Habitat is purchasing four vacant houses in St. Paul this month.
"It's a sad situation, this market, but we can't lose sight of the opportunity within it," said Sue Haigh, president of Twin Cities Habitat for Humanity.
The dual strategies serve many parties. Habitat continues its goal of staking a claim in the suburbs. Developers find a willing buyer in a tough market. And cities boost their housing stock.
Twin Cities Habitat's work mirrors that of other Habitat chapters around the country, said Stephen Seidel, Habitat International's director of field operations.
"It's a new part of our ongoing relationships with cities and developers," he said. "These are conversations that hadn't been happening even six months ago."
Getting some bargains
Haigh became president of Twin Cities Habitat three years ago, during what she calls "the very peak of the boom" in real estate. At that point, the nonprofit -- whose mission is affordable home ownership -- had no inventory of lots and "couldn't even talk to people about purchasing land, it was so competitive," she said.
At that peak, the Chaska lots cost more than $60,000 apiece. In the past year, Habitat ended up buying them for $45,000 and $50,000. In Hopkins, the nonprofit is buying two more traditional single-family lots from the city for $75,000 each, down from the list price of $89,000.
The nonprofit and others like it are attempting to lock up as many lots as they can at today's lower prices before the market rebounds.
And the state's helping.
In November, the Minnesota Housing Finance Agency awarded Habitat a $1.4 million grant to purchase 28 to 35 parcels of land in Carver and Scott counties.
In most cases, Habitat won't build on a parcel until owning it for more than a year. The purchases are part of a new approach it and the state call "strategic land acquisition."
"When the market does turn around, we'll already have in place land for affordable housing, which in growing suburban communities is so difficult to get," said Tim Marx, state Housing Finance commissioner.
The finance agency just accepted applications for its next round of grants, and Habitat is just one of a number of applicants seeking funding for that purpose, he said.
Others include local affordable housing enterprises such as Chaska Community Land Trust, an organization that makes home-ownership affordable by selling the house but keeping the land. It applied for $500,000 in state funding to buy single-family houses, once "way, way out of our price range," said Matt Podhradsky, the organization's president and Chaska's assistant city administrator.
Townhouses have advantage
Habitat's strategy has required its volunteers to master building townhouses, which now make up about half the group's production.
"With the economies of scale, we get more for our money" with townhouses, said Karl Batalden, Habitat's director of government and community relations.
For example, Habitat just sold eight attached units in a development in Ramsey, where it plans to build more. The overall development is only half-done -- another victim of the market.
But the Twin Cities Habitat has never bought houses in foreclosure. After it closes on four homes in St. Paul's Dayton's Bluff area, the nonprofit plans to acquire more.
Although Habitat tends to build new housing, it also operates rehabilitation and repair programs and will likely fix up, rather than raze and rebuild, vacant houses that are in good shape.
The four St. Paul properties are in City Council Member Kathy Lantry's ward, where foreclosures are "an enormous problem," she said. About 2.5 percent of the city's 56,000 residential buildings are unoccupied.
Here and in other cities with a similar problem -- such as Detroit, Cleveland and Milwaukee -- Habitat is working with cities and lenders to buy vacant houses, Seidel said.
"Oftentimes these properties have complex stories behind them: title work, unpaid water bills," he said. "There's a lot of behind-the-scenes stuff that has to get done."
A bill in this legislative session would make it easier for nonprofits dedicated to affordable housing to take possession of vacant, "nuisance" properties and rehab them.
Shifting to the suburbs
Although it still works in the core cities, since 2007, Habitat has strived to build 75 percent of its houses in the suburbs, where schools are good, the job market's growing and affordable housing is often needed.
Lemma Beti, his wife and children recently helped build and then moved into one of Habitat's first five houses in Clover Field in Chaska. Their home is within walking distance of commuter bus service, the elementary school his youngest daughter attends and a sizable trail system.
The lots in the development are narrow and meant for modestly priced homes; Beti's mortgage is $624.52 a month, 23 percent of his income as a truck driver. The house features three bedrooms, two stories and an unfinished basement. Most of the walls are still bare, although his sons' room features a single wrestling poster.
Before moving in, his family -- who fled Ethiopia during political unrest there -- rented an apartment in Riverside Plaza in Minneapolis, where three of his children slept on the floor.
"It was a troubled life," he said. "Now, this is my Habitat home, where my babies sleep, where they eat, where they go to school. It is a beautiful life."